Bain Capital acquires Telefonica unit in €1bn deal

Spanish telecom major Telefonica SA (MCE:TEF) said today it had sealed a definitive deal to dispose of its customer relationship management (CRM) business Atento to firms controlled by US private equity group Bain Capital LLC for about EUR1bn (USD1.3bn).

The agreed consideration represents the transaction’s enterprise value and includes a contingent deferred payment of EUR110m. The total amount also takes into consideration an EUR110m funding that will be provided by Telefonica to the buyer.

The sale needs to be greenlighted by the relevant regulators and is scheduled for completion by no later than 31 December 2012. Through it, Telefonica is looking to improve its financial flexibility. The move is also part of the policy of proactive management of the firm’s portfolio of assets, the vendor explained.

The parties have also entered into a nine-year framework agreement that calls for Atento to offer services to its former parent.

According to Telefonica, Madrid-based Atento is the multinational leader in the CRM field in Latin America and the second biggest sector player on a global basis.

The firm has since 1999 developed its business model in over 15 countries with a headcount of more than 152,000 employees. Last year, it generated revenues of EUR1.8bn. Its net debt amounted to EUR175m as of June this year.

Sponsor Bain acquires 30% stake in Genpact for $1bn

US private equity firm Bain Capital LLC has agreed to buy some USD1bn (EUR815.7m) worth of common shares in Bermuda-based business process management (BPM) company Genpact Ltd (NYSE:G) from certain existing sponsors, the target announced.

As part of the agreement, Bain’s South Asia Private Investments and other units will purchase around 68m shares in Genpact, equal to a 30% stake, from fellow buyout firms General Atlantic LLC and Oak Hill Capital Partners LP for USD14.76 apiece. The vendors will then own a combined stake of about 10% in the Bermuda-based company.

The share purchase will be implemented after Genpact distributes its special dividend of USD2.24 a share to all stockholders and its closing is expected to occur this year. The transaction is also pending anti-trust and competition approvals.

Following completion, Bain will appoint four directors to Genpact’s board which will substitute the current GA and Oak Hill representatives. The private equity investor has agreed not to sell any of the acquired shares for a period of two and a half years.

Morgan Stanley (NYSE:MS), Citigroup Inc (NYSE:C) and Cravath, Swaine & Moore LLP are advising Genpact, while JP Morgan (NYSE:JPM) and Ropes & Gray LLP are consulting Bain.

Private equity firms in talks to acquire RBS’ Direct Line

Royal Bank of Scotland Group Plc (LON:RBS) may not get to list its unit Direct Line Insurance Plc as two consortia made up of leading private equity groups prepare to make a move on the business, the Sunday Times reported citing City sources.

RBS has been instructed by European Union regulators to sell Direct Line as compensation for its state-sponsored rescue in 2008. The UK lender is planning to float 30% of the business in September and has lined up 11 investment banks to assist with the process, with Goldman Sachs Group Inc (NYSE:GS), Morgan Stanley (NYSE:MS) and UBS AG (NYSE:UBS) assigned leading roles in the undertaking.

RBS is expected to file the required documents with the London Stock Exchange next month, the newspaper added.

However, the two private equity consortia are preparing to make their move at the end of July, potentially thwarting RBS’ plans. One of the groups comprises US private equity giants Blackstone Group LP (NYSE:BX) and Bain Capital LLC, while the rival bidding combo is made up of KKR & Co LP (NYSE:KKR) and UK-based Apax Partners Holdings Ltd and BC Partners Limited, the Sunday Times was told.

Direct Line, the company behind brands such as Churchill and Green Flag, is the number one UK car insurer in terms of policy numbers and the top home insurance provider, the article went on to add.

It has long been coveted by rival sector players and private equity groups although RBS’ attempt to offload the business in 2008 proved unsuccessful as bidders failed to match the asking price of GBP7bn (USD10.9bn/EUR8.9bn).

BC Partners also featured among the bidders then, joining forces with Apollo Global Management LLC (NYSE:APO). The auction also attracted US billionaire investor Warren Buffett and a consortium made up of CVC Capital Partners Limited and insurance group Swiss Re (PINK:SSREY).

Direct Line’s valuation has shrunk significantly since then although the company reversed its heavy 2010 losses to exit last year with profits of GBP454m, the Sunday Times said.